Sea Limited Reports Fourth Quarter and Full Year 2020 Results

Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 Highlights

• Group
  • Total GAAP revenue was US$1.6 billion, up 101.6% year-on-year.
  • Total gross profit was US$533.7 million, up 101.5% year-on-year.
  • Total adjusted EBITDA¹ was US$48.7 million compared to US$(104.9) million for the fourth quarter of 2019.

• Digital Entertainment
  • Bookings² were US$1.0 billion, up 111.1% year-on-year.
  • Adjusted EBITDA¹ was US$663.5 million, up 149.1% year-on-year.
  • Adjusted EBITDA represented 65.5% of bookings for the fourth quarter of 2020, compared to 55.5% for the fourth quarter of 2019.
  • GAAP revenue was US$693.4 million, up 71.6% year-on-year.
  • Quarterly active users (“QAUs”) reached 610.6 million, an increase of 72.1% year-on-year.
  • Quarterly paying users grew by 119.5% year-on-year to 73.1 million, and represented 12.0% of QAUs for the fourth quarter compared to 9.4% for the same period in 2019.
  • Average bookings per user were US$1.7, compared to US$1.4 for the fourth quarter of 2019.
  • Our self-developed global hit game, Free Fire, was the most downloaded mobile game globally for 2020, according to App Annie³, maintaining this leading position for a second consecutive year.
  • Free Fire continued to be the highest grossing mobile game in Latin America and in Southeast Asia for the fourth quarter and for the full year of 2020, according to App Annie³. Free Fire has maintained this leading position for the past six consecutive quarters.
  • Free Fire was also the highest grossing mobile game in India for the fourth quarter and for the full year of 2020, according to App Annie³.
  • Free Fire related content recorded over 72 billion view counts across YouTube globally in 2020, making Free Fire the most viewed mobile-only video game globally on YouTube for both 2019 and 2020. It was also the third most viewed among all video games on YouTube in 2020.
  • Our esports and community-building efforts continued to attract significant followings in the fourth quarter. Free Fire esports tournaments hosted during the quarter have accumulated over 170 million online views to date.

• E-commerce
  • GAAP revenue was US$842.2 million, up 178.3% year-on-year.
  • GAAP revenue included US$627.6 million of GAAP marketplace revenue⁴, up 175.4% year-on-year, and US$214.6 million of GAAP product revenue⁵, up 187.1% year-on-year.
  • Gross orders totaled 1.0 billion, an increase of 134.6% year-on-year.
  • Gross merchandise value (“GMV”) was US$11.9 billion, an increase of 112.5% year-on-year.
  • Adjusted EBITDA¹ was US$(427.5) million compared to US$(306.2) million for the fourth quarter of 2019. Adjusted EBITDA loss per order decreased by 41.4% year-on-year to US$0.41, compared to US$0.70 for the fourth quarter of 2019.
  • In Indonesia, where Shopee is the largest e-commerce platform, it registered over 430 million orders for the market in the fourth quarter, or a daily average of around 4.7 million orders, an increase of over 128% year-on-year. Shopee also ranked first in Indonesia by average monthly active users, total time spent in app on Android, and downloads, in the Shopping category for the fourth quarter and for the full year of 2020, according to App Annie³.
  • Both in Southeast Asia and in Taiwan, Shopee ranked first in the Shopping category by average monthly active users, total time spent in app on Android, and downloads, for the fourth quarter and for the full year of 2020, according to App Annie³.
  • Shopee was also the third most downloaded app globally in the Shopping category for the full year of 2020, according to App Annie³.
  • Shopee is building ever-stronger brand affinity with our communities. Shopee ranked first in YouGov’s “Best APAC Buzz Rankings 2020” and ranked eighth in YouGov’s “Best Global Brands 2020”. Shopee represents one of the only two e-commerce brands in YouGov’s top 10 global brand rankings.

Full Year 2020 Highlights

• Group
  • Total GAAP revenue was US$4.4 billion, up 101.1% year-on-year.
  • Total gross profit was US$1.3 billion, up 123.0% year-on-year.
  • Total adjusted EBITDA¹ was US$107.0 million compared to US$(178.6) million for the full year of 2019.

• Digital Entertainment
  • Bookings² were US$3.2 billion, up 80.3% year-on-year, exceeding our recently raised full-year guidance for 2020.
  • Adjusted EBITDA¹ was US$2.0 billion, up 94.0% year-on-year.
  • Adjusted EBITDA represented 62.2% of bookings for the full year of 2020, compared to 57.8% for the full year of 2019.
  • GAAP revenue was US$2.0 billion, up 77.5% year-on-year.

• E-commerce
  • GAAP revenue was US$2.2 billion, up 159.8% year-on-year.
  • GAAP revenue included US$1.6 billion of GAAP marketplace revenue⁴, up 155.2% year-on-year, and US$575.4 million of GAAP product revenue⁵, up 173.1% year-on-year.
  • GAAP revenue plus sales incentives net-off was US$2.5 billion, exceeding our recently raised full-year guidance for 2020.
  • Gross orders totaled 2.8 billion, an increase of 132.8% year-on-year.
  • Gross merchandise value (“GMV”) was US$35.4 billion, an increase of 101.1% year-on-year.
  • Adjusted EBITDA¹ was US$(1.3) billion compared to US$(1.0) billion for the full year of 2019. Adjusted EBITDA loss per order decreased by 46.5% year-on-year to US$0.46, compared to US$0.86 for the full year of 2019.

Digital Financial Services Update

In the fourth quarter, we continued to see strong growth in the adoption of SeaMoney’s offerings. Our mobile wallet total payment volume exceeded US$2.9 billion for the quarter and US$7.8 billion for the full year of 2020. Moreover, quarterly paying users for our mobile wallet services surpassed 23.2 million in the fourth quarter with monthly paying users in Indonesia surpassing 10 million during the quarter.

We also continued to expand our suite of online and offline third-party use cases and partnerships. We recently expanded our partnership with Google to offer our mobile wallet as a payment option for the Google Play Store in Indonesia, following our partnership with Google in Thailand from March 2020.

Other Updates

Sea has acquired 100% of Composite Capital Management (“Composite”), a Hong Kong-licensed global investment management firm. Composite was founded and is led by David Ma. Its team has a demonstrated track record of successful, long-term investing, and a deep understanding of industry trends and relevant sectors globally.

Concurrent with this acquisition, we are establishing Sea Capital, a platform to manage Sea’s overall investment efforts. David Ma will serve as the Chief Investment Officer of Sea Capital and will report directly to Sea’s Chairman and Group Chief Executive Officer, Forrest Li. Sea Capital will focus on partnering with entrepreneurs using technology to better serve consumers and small businesses. Through Sea Capital, we intend to invest into and support the growth of our broader ecosystem to create value for our users, business partners, and communities. In